DRIPPERS LIMITED

Executive Summary

Drippers Limited is a young micro-entity in the take-away food sector with a modest but positive net asset position. However, the company shows a weak liquidity profile with negative net working capital, raising concerns about short-term cash flow. Credit facilities could be approved on a conditional basis, subject to close monitoring of cash management and financial performance.

DRIPPERS LIMITED - Analysis Report

Company Number: 13889078

Analysis Date: 2025-07-20 19:14 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Drippers Limited is a recently incorporated micro-entity operating in the food service sector (take-away and unlicensed restaurants). While the company shows positive net assets (£26,264 at 2023 year-end) and a clean filing history with no overdue accounts or returns, the financial data indicates some concerns. The current liabilities (£22,280) exceed current assets (£3,544), yielding a negative net working capital (current assets less current liabilities) of -£18,736, which suggests short-term liquidity pressure. The company’s balance sheet improved from a nominal net asset base (£1 in 2022) to a modest positive net asset figure in 2023, but the volatility and small scale warrant careful monitoring. Given the business is young and in a competitive sector, the credit should be extended with conditions such as ongoing financial reporting and review of cash flow forecasts.

2. Financial Strength:
   The balance sheet reflects a micro-entity with fixed assets of £45,000, likely representing essential equipment or premises fit-out. The total net assets of £26,264 indicate positive equity but at a relatively low level. The decline from £40,000 net assets in 2021 (likely opening or pre-trading figures) to £26,264 in 2023 suggests some depletion of reserves or investment in fixed assets. The small scale and negative net current assets (-£18,736) highlight limited buffer to absorb operational shocks or unexpected liabilities. The company’s shareholders’ funds and net assets are positive but modest.

3. Cash Flow Assessment:
   The current assets of £3,544 (likely cash and receivables) do not cover the current liabilities of £22,280, indicating potential liquidity constraints. Negative net working capital may impair the ability to meet short-term obligations without additional financing or improved cash inflows. The company's sector is cash-driven (take-away food), which may help with cash collection, but close attention to cash flow management is critical. There is no detailed cash flow statement provided, so assessment relies on balance sheet data.

4. Monitoring Points:

• Track quarterly or monthly cash flow and liquidity metrics to ensure current liabilities can be met timely.
• Monitor profitability and revenue trends as the company matures beyond initial startup phase.
• Review management’s ability to control costs and manage working capital, especially given the negative net current assets.
• Confirm no worsening of creditor days or build-up of unpaid liabilities.
• Verify continued compliance with filing deadlines and regulatory requirements.